CLARITY Act timeline far from assured, TD Cowen says

TD Cowen's Washington Research Group sees the CLARITY Act's path to law as anything but clear. The Senate is expected to start procedural steps the week of July 13, with a possible floor vote that week or the week of July 20, the investment bank said in a note.

That timeline is tight. July 24 is the key date before the House leaves for August recess, wrote Jaret Seiberg, the bank's managing director. He questioned whether the bill could realistically advance later in the year if lawmakers miss that window. "We continue to question if the bill can pass in the fall before the election," Seiberg said.

That skepticism mirrors earlier warnings. Galaxy Research last week cut its estimate of the bill becoming law in 2026 to 50% from 60%, citing Senate scheduling constraints. JPMorgan analysts earlier this month also saw less than a 50% chance of passage this year. They pointed to the midterm election and unresolved policy disputes. The stablecoin yield debate remains a separate sticking point.

One unresolved layer is whether President Donald Trump would sign the bill. Democrats are expected to force Republicans to vote on politically difficult amendments, Seiberg said. GOP lawmakers will not take those votes unless they believe Trump will approve the final bill.

That confidence has eroded after Trump declined to sign a bipartisan housing bill his own administration negotiated, and later said he would not approve legislation until Congress passes the Safeguard American Voter Eligibility Act. Seiberg allowed that Trump could still make an exception for the CLARITY Act. The uncertainty could delay the process, he said.

Ethics provisions are another flashpoint. Democrats want to ban government officials and their families from owning crypto businesses, a rule that would cover the president. Trump has not signaled a willingness to compromise, Seiberg said. That leaves Republicans in a position where they may have to reject a Democratic amendment. "It is not clear to us the GOP has the votes," Seiberg wrote. He named several Republican senators who could be pivotal: Thom Tillis, Mitch McConnell, Bill Cassidy, John Cornyn, Susan Collins, and Lisa Murkowski. Several are moderates or retiring.

Law enforcement has also weighed in. Last week a group of law enforcement organizations sent a letter to the White House arguing that Section 604 of the CLARITY Act, the Blockchain Regulatory Certainty Act, could weaken oversight by protecting non-custodial software developers. They said it could make investigations into illicit crypto activity more difficult. The White House has continued meeting with stakeholders over those concerns. Seiberg said resolving them would improve the bill's prospects.

The stablecoin yield provisions appear unlikely to change despite continued opposition from banks, Seiberg said.

July 24 remains the hard marker. If the Senate cannot advance the CLARITY Act before the August recess, the fall window shrinks dramatically with the election approaching. Seiberg's note sums it up: "We continue to question if the bill can pass in the fall before the election."